Consumers owe more on their student loans than their credit cards, according to data released this month by the Federal Reserve.
The data found that in June, Americans owed $826.5 billion in revolving debt – which usually takes the form of credit card debt – and $829.78 billion in student loan debt. This is the first time in history Americans have carried more student loan debt than credit card debt.
An analysis by Mark Kantrowitz, who publishes the college scholarship and loan search websites Finaid.org and Fastweb.org, said the increase in student loan debt is another consequence of the economic downfall.
“This is as much due to families paying down their credit card debt as it is to the growth in student loan debt,” Kantrowitz said.
Kantrowitz attributed the escalation in student loan debt to anemic growth in academic grants. Student debt, he said, will continue to “go up just like the sun comes up every morning.”
By his math, there is $605.6 billion in federal student loans outstanding and $167.8 billion in private student loans outstanding.
In 2008, 49 percent of GW students graduated with debt, incurring an average of $30,817, according to The Project on Student Debt. Of that debt, 47 percent is owed to the federal government at an average of $17,198.
American University had the highest student debt of the D.C.-area universities in 2008, with an average of $34,213, according to the data. Georgetown University graduates accumulated $23,333 according to the report.
At GW’s market basket schools Boston University and New York University, students accrued an average of $26,586 and $34,850 by graduation, respectively. Last September, it was reported that GW students graduate with an average of 13 percent higher debt than the average of private universities across the nation.
Rising senior Mindy Michaels, who will be almost $35,000 in debt after graduation next spring, said she has watched her older siblings go through the process of taking out and repaying student loans so the process is less stressful.
“Because I accept [student loans] are the reality of life, it’s not as stressful,” Michaels said. “It does limit me on what I can do after school, though.”
Michaels said she will need to find a job as soon as possible upon graduation and will not have the comfort of spending time to choose what she would like to pursue.
“That piece of it is stressful, not having the freedom to choose what I will be doing,” Michaels said.
Elizabeth Barnett, also a senior, said she is worried about paying for graduate school because she has no option but to take out loans and incur debt.
“I will graduate at zero, that is, with zero in my bank account and zero in student loan debt. The downside is, I’m terrified of taking out loans,” Barnett said. “I could take out loans, or I could just not go to [graduate] school because I have no money.”